Tokyo, Japan-based seafood company Kyokuyo saw its year-over-year revenue and profits climb in Q1 2024, but China’s ongoing ban of Japanese seafood products is continuing to hit the company’s marine product exports.
In earnings results released on 5 August, Kyokuyo announced it had revenue of JPY 68.2 billion (USD 471 million, EUR 431 million) in Q1 2024, up 9 percent from JPY 62.4 billion (USD 431 million, EUR 394 million) in Q1 2023. The company’s operating profit also increased, jumping 28.1 percent to JPY 3.1 billion (USD 21.4 million, EUR 19.6 million) in Q1 2024, up from JPY 2.4 billion (USD 16.6 million, EUR 15.2 million) in Q1 2023.
Kyokuyo’s quarterly net income attributable to owners of the parent company reached JPY 2.4 billion (USD 16.6 million, EUR 15.2 million), up 32 percent year over year.
Kyokuyo said its marine products segment had positive results in part thanks to strong domestic sales of salmon, shrimp, and crab, which helped boost overall revenue. Kyokuyo attributed the increase to rising seafood prices that drove people to “secure raw materials in anticipation of future price increases.”
“Profits were also strong due to an increase in unit sales prices accompanying the market price rise,” Kyokuyo said in its results.
Its export business, however, continues to take a hit from China’s ongoing ban of seafood from Japan. China initiated a full ban on seafood exported from Japan, citing the controversial release of treated cooling water from the Fukushima Daiichi Nuclear Power Station. Prior to the ban, China was a destination for 42 percent of Japan’s seafood, forcing the country to get creative to find a market for a number of its seafood products.
In its results, Kyokuyo said exports in its marine products segment to overseas markets from Japan benefited from a weak yen, but it wasn’t enough to make up for the Chinese ban “and overall sales decreased.”
Kyokuyo said that its overseas businesses – which aren’t impacted by the seafood ban – benefited from renewed demand for raw material for processing in China. However, “the supply of North Pacific fish and other products did not keep up, resulting in lost sales opportunities.”
Sales also improved in Europe and the U.S., as “stagnant inventory was cleared,” the company said.
Overall, the results were positive, as sales in the segment increased to JPY 35.4 billion (USD 244 million, EUR 223 million) in Q1 2024, an increase of 17.4 percent compared to Q1 2023. The segment's operating profit also increased, rising to JPY 1.6 billion (USD 11 million, EUR 10 million), marking a 31 percent rise.
In Kyokuyo’s fresh food segment, due to tuna market recovery, sales of the company’s frozen bluefin tuna products were solid and the sale of processed products was also favorable, which it attributed to a “perceived low price of bonito.” Landing volumes in the company’s overseas purse seine fishing business improved and lifted both sales and profits. Raw food products, such as toppings for sushi, saw lower sales – but profit increased due to price revisions.
Overall, profits for the fresh food segment improved in Q1 2024 compared to the same period of 2023. Sales increased to JPY 15.7 billion (USD 108 million, EUR 99 million), up 1.2 percent year over year, and operating profit jumped to JPY 986 million (USD 6.8 million, EUR 6.2 million), an increase of 60.5 percent.
Kyokuyo’s food business segment, which includes frozen products, canned foods, and snacks, had increased sales but decreased profits. The company earned revenue of JPY 16.5 billion (USD 114 million, EUR 104 million), up 2 percent year over year, and saw operating profits of JPY 777 million (USD 5.4 million, EUR 4.9 million), down 7.8 percent.
The company said its sales of frozen foods for retail increased due to increased production, and sales of canned mackerel improved compared to the previous year as it had declined in Q1 2023 due to a temporary suspension of sales; canned tuna and canned sardines saw organic improvements.
“However, there was a trend toward a decline in consumption due to the price revision implemented in the previous period, and sales of commercial frozen foods, especially products to be heated such as fillets, fell,” Kyokuyo said.
Kyokuyo recently launched its medium-term business plan, “Gear Up Kyokuyo 2027,” to make organizational changes and expand its overseas production capacity. So far in 2024, the company has followed through on its expansion plans, purchasing Turkish seafood processor Kocaman Su Ürünleri İhracat ve İthalat Ticaret in February, launching a joint venture with British Columbia, Canada-based Clear Ocean Seafood in April, and purchasing Netherlands-based Northseafood Holding in June.
